Analysis of current economic conditions and policy

Roundtable discussion on the financial crisis

I participated on Friday with several other UCSD faculty members (including Nobel laureate Harry Markowitz) in a discussion about the current economic crisis. If you have RealPlayer, you can view the discussion here, though I recommend fast-forwarding to skip the first 8 introductory minutes to get to the actual discussion. If you just want my slides, I’ve posted them here.

This weekend I typed up “draft testimony” on what caused the mortgage/financial crisis. Like anyone wants to hear it. Anyway, I’ll paste it in below the fold. UPDATE: If you follow the links in James Hamilton’s post, during his talk…

What’s interesting, is that MEW amounted to about $700 Billion/year for 2004-2006, but has declined to almost zero. By my reconning, with an M2 money velocity of 2, and assumption that all the withdrawn money was spent, we could conclude that GDP has declined 10% in the last two years just due to the decline in MEW…
What gives with the BEA GDP numbers?
Why hasn’t the BEA or the FED done a survey to find out where all the extracted money went?

If you’ve watched the previous debates, you’ve noticed the Perception Analyzer at the bottom of the screen. It records the reactions of about 30 “uncommitted” voters – but some say your brain can’t devote its full attention to what the debaters are saying and what you’re seeing.[url=http://www.chicagotribune.com/news/chi-talk-cnn-debateoct07,0,7565415.story]More..[/url]
by proxrte101a